By Niket Nishant

(Reuters) – Kaspi.kz was valued at $17.51 billion when its shares debuted 0.5% above their offer price on Friday, a day after the Kazakhstan-based banking and fintech giant fetched $1 billion for its investors in an upsized IPO.

The lukewarm reception, especially on a day when the benchmark S&P 500 index was just shy of a record close, indicated investor caution around new listings was firmly in place, spilling into 2024 after almost two years of sluggish U.S. IPO markets.

Still, a string of startups such as Reddit and ServiceTitan are looking to go public over the next few months, as dovish expectations around the Federal Reserve’s interest rate trajectory encourages IPO hopefuls.

Kaspi.kz’s American depositary shares opened at $92.50 each, compared with their IPO price of $92.

Its share sale had fetched over $1 billion for its billionaire executives, co-founder Vyacheslav Kim and CEO Mikheil Lomtadze, as well as another shareholder, Asia Equity Partners. No proceeds went to the company.

The investors upsized their offering to 11.3 million shares on Thursday, from earlier plans to sell 9 million shares.

Kaspi.kz operates through three segments – payments, marketplace and fintech – and caters to both consumers and merchants. Besides e-commerce purchases, its app lets customers access buy now, pay later (BNPL) debt, renew their driving licenses and register their businesses.

The diversification that conglomerates like Kaspi.kz offer can benefit investors, since one unit can cushion the hit if another suffers.

On the other hand, myriad businesses can bring their own risks and make it harder for markets to evaluate the company. For instance, Kaspi.kz’s sprawling empire includes an e-grocery business, which is known for its logistical complexity and is viewed as a low-margin business.

Morgan Stanley, J.P. Morgan and Citigroup are the lead underwriters for the IPO.

The company is already listed on the London Stock Exchange, where its valuation exceeds $19 billion.